Law:

Section:

Section 115J of the Income-tax Act, 1961 - Zero-tax companies - Assessment year 1989-90 - Whether only requirement of provisions of sub-section (1A) of section 115J is that accounts, more particularly profit and loss account for relevant previous year, have to be prepared in accordance with Parts II and III of Schedule VI to the Companies Act, 1956 and accounts so prepared have to be certified by chartered accountants - Held, yes - Whether Assessing Officer can discard accounts prepared in accordance with requirements of Parts II and III of Schedule VI to the Companies Act and certified by chartered accountants, on ground that same had not been approved at annual general meeting of company - Held, no FACTS The assessee-company filed its return of income declaring its total income as computed under section 115J. The said return was revised twice. The Assessing Officer discarded the accounts filed with revised return of income, holding that the same had not been presented before the annual general meeting of the company. On appeal before the Commissioner (Appeals), the assessee did not succeed. In second appeal before the Tribunal, the assessee succeeded. On the revenue's appeal to the High Court : HELD The facts revealed that the profit and loss account, which was prepared subsequently, was in accordance with Parts II and III of Schedule VI to the Companies Act, 1956 but was different from the profit and loss account approved at the annual general meeting. The only requirement of provisions of sub-section (1A) of section 115J is that the accounts, more particularly the profit and loss account for the relevant previous year, have to be prepared in accordance with Parts II and III of Schedule VI to the Companies Act, 1956 and accounts so prepared have to be certified by the chartered accountants. In the instant case, it was not found by any authority that the revised accounts submitted with revised return of income were not audited. In fact, the positive averment made by the assessee before the Commissioner (Appeals) remained unrefuted. [Para 8] In the circumstances, the Assessing Officer had no powers or jurisdiction under the provisions of the Act to take a…

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